Do You Need Mortgage Life Insurance?
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Do you know the difference between term life insurance and mortgage insurance policies? Many new homeowners consider one but not the other, which can leave families in a lurch with insufficient funds to cover their essential needs.
A mortgage life insurance policy is a form of insurance offering coverage for your remaining mortgage should you die. Unlike a term life insurance policy, which goes to a named beneficiary, mortgage life insurance goes to the lender. This will help your family rest easy knowing that they will not have to worry about making mortgage payments to a bank or similar party.
Because of these key differences, a term life insurance policy simply may not be enough to cover mortgage payments. Moreover, different factors will affect a person’s ability to qualify for each type of policy. Health issues, for example, may prohibit someone from obtaining a sufficient term life insurance policy but will not affect a mortgage insurance policy. On the other hand, actions such as refinancing a mortgage will impact your ability to secure or retain a mortgage insurance policy.
Ultimately, you may need both types of policies once you become a homeowner. As such, it’s important to know the differences between each and consider your needs to ensure that you are adequately covered. Take this quiz to test your knowledge of what term life insurance and mortgage insurance policies cover; what it takes to qualify for each; who stands to receive the payout; and what factors may inhibit your ability to obtain these policies.
This Term Life Insurance Quiz was brought to you by Health I.Q.